In a divorce, one party is often awarded the marital home. Generally, to go along with the residence, the final decree of divorce also holds that party accountable for all liens and mortgages associated with the property. A common issue that arises after one party is awarded the residence, is how to take the other party’s name off any lien or mortgage. Using a Special Warranty Deed and a Deed of Trust to Secure Assumption may help resolve this issue.

 

            In order to transfer ownership, the party awarded the marital home (the Grantee) may use a Special Warranty Deed. This type of deed allows the Grantee to be named the sole owner of the residence. A Special Warranty Deed assigns the legal title and all interest in the property to the Grantee. The non-awarded party (the Grantor) no longer has any legal title or any interest in the property.  However, this does not affect any party’s responsibility to a lien holder or mortgage company.

 

            To protect the Grantor, a Deed of Trust to Secure Assumption should also be used.  A Deed of Trust to Secure Assumption protects the Grantor from future liability on any lien or mortgage connected to the property. This deed names the Grantor as a beneficiary, and requires the Grantee to assume full liability for any debt associated with the property.  If the Grantee fails to pay the mortgage, the Grantor may foreclose on the property like any other creditor to protect the Grantor’s interest.